The crowd was cheering. The subject 'crowd' is a singular noun taking the singular verb.
The alternate: The crowds were cheering when the soldiers returned from World War 2.
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the crowd was cheering
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It can be (cheering crowds).
Cheering is the present participle of the verb (to chafe) and
can be an adjective or a noun (gerund).
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No, because cheering isn't a sport
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The collective nouns could be a crowd of people cheering and shouting, an audience of people cheering and shouting, or a mob of people cheering and shouting.